Consumer spending lifts 4th-quarter growth
Consumer spending rose in November by the most in five months as discounts lured early holiday shoppers, giving the U.S. economy a boost at the end of 2013. Purchases increased 0.5 percent after a 0.4 percent gain in October that was larger than previously estimated, the Commerce Department reported Monday. Other data showed consumer sentiment climbed in December to a five-month high. Record stock prices and a rebound in home values are boosting wealth among upper-income Americans, benefiting retailers such as Neiman Marcus. At the same time, the job market is strengthening, which means spending advances will become more broad-based, enabling the world’s largest economy to pick up in 2014. The one soft spot was incomes, which climbed 0.2 percent in December, short of the 0.5 percent increase projected by economists surveyed. The shortfall reflected a slump in earnings by farmers as commodity prices dropped last month rather than flagging worker pay, according to the Commerce Department.
Holiday sales down for third week
After a strong start to the holiday shopping season, sales at stores have fallen for the third consecutive week as Americans continue to hold back on spending during what is traditionally the busiest buying period of the year. Sales at U.S. stores dropped 3.1 percent to $42.7 billion for the week that ended on Sunday compared with the same week last year, according to ShopperTrak, which tracks data at 40,000 locations. That follows a decline of 2.9 percent and 0.8 percent during the first and second weeks of the month, respectively.
Jos. A. Bank rejects Men’s Wearhouse offer
Jos. A. Bank announced it has rejected a late November takeover bid from rival Men’s Wearhouse, saying the offer undervalued the company. The two retailers have in the past months been playing a game of cat-and-mouse as each company has tried to acquire the other. In October, Jos. A. Bank Clothiers Inc. offered to buy Men’s Wearhouse for $2.3 billion, but the offer was rejected because Men’s Wearhouse executives believed the bid undervalued the company. Then, in late November, Men’s Wearhouse turned the tables and offered to acquire Jos. A. Bank for $55 a share, for an estimated $1.2 billion. Men’s Wearhouse said that represented a 45 percent premium over Jos A. Bank’s unaffected enterprise value and 32 percent over the company’s closing share price on Oct. 8, the day before Jos. A. Bank bid for Men’s Wearhouse.
Tribune Co. to buy Gracenote for $170 M
Tribune Co. has reached an agreement with Sony Corp. of America to acquire Gracenote Inc., a music data company. Tribune, the parent of the Los Angeles Times, will pay $170 million in a deal expected to close within the first quarter of 2014. In a statement, Tribune said it will combine Gracenote with Tribune Media Services, which provides television and movie metadata. Gracenote, which is headquartered in Emeryville, Calif., was bought by Sony in 2008. Its technology is used in mobile devices and tablet applications, including Apple Inc.’s iTunes, and in 50 million automobiles.
Britain opens bribery inquiry at Rolls-Royce
Britain’s Serious Fraud Office has “opened a criminal investigation into allegations of bribery and corruption at Rolls-Royce,” the maker of jet engines and other power systems. The government agency responsible for prosecuting large-scale corruption and other crime is stepping up a long-running inquiry into the company, which is one of the largest in Britain. The agency had spent about a year weighing the evidence before its director, David Green, decided there were sufficient grounds to go ahead with a criminal investigation. The case threatens to tarnish the reputation of one of Britain’s few world-leading technology companies. Rolls-Royce engines power 30 types of civil airliners as well as 24 military engine programs.